Kenmare Resources Plc · LSE:KMR

Kenmare Resources — FY2014 Earnings Presentation

18 slides from Kenmare Resources's earnings presentation, Apr 30, 2015

  1. Slide 1: Kenmare Resources plc 2014 Results

    Kenmare Resources plc 2014 Results 30 April 2015

  2. Slide 2: Disclaimer

    Disclaimer This Presentation (the “Presentation”) has information or opinions on which it is significant in the context of the been prepared and issued by Kenmare based, or any other written or oral statements, estimates and projections Resources plc (the “Company” or information made available in c

  3. Slide 3: Overview

    1 Overview 3

  4. Slide 4: Kenmare 2014 Results Overview

    Kenmare 2014 Results Overview  Debt restructuring completed April 2015 – will create a stable financial platform  Ore mined up 42% to 34,120,000 tonnes (2013: 23,950,000 tonnes)  Production of HMC up 13% to 1,287,300 tonnes (2013: 1,137,200 tonnes)  Production of ilmenite up 19% to 854,600 tonne

  5. Slide 5: Key Performance Indicators

    Key Performance Indicators Production 2012 - 2014 (Half-Yearly) 000t Revenue & EBITDA 2010 – 2014 US$m 500,000 250 Zircon Ilmenite Sales-Capitalised 450,000 Sales EBITDA 400,000 200 350,000 Revenue & EBITDA US$m 300,000 150 250,000 200,000 100 150,000 100,000 50 50,000 0 - H1 2012 H2 2012 H1 2013 H2

  6. Slide 6: Summary Results

    2 Summary Results 6

  7. Slide 7: 2014 Income Statement Review

    2014 Income Statement Review 2014 2013 Comment on 2014 & movement US$m US$m Revenue 174.3 137.9 Sales up 26% due to higher sales vol. despite price drop (Note: 2013 excl. $23.6m capitalised revenue) Cost of Sales & Opex (205.8) (133.2) Costs up 55% due to higher vol sold + higher costs of operating

  8. Slide 8: 2014 Revenue Review

    2014 Revenue Review Volume/Mix Movement Pricing Movement 820,000 $220 Rutile Volume +161% 800,000 $1,400 $200 Secondary Zircon Volume - 24% - 19% 780,000 $180 Ilmenite price per Tonne (US$) Primary Zircon Volume +92% $1,200 Zircon Price per tonne (US$) Shipments (Tonne s) 760,000 $160 Ilmenite Volum

  9. Slide 9: 2014 Cash Operating Costs Review

    2014 Cash Operating Costs Review 2014 2014 2013 2013 US$m US$m US$m US$m Cost of sales 173.4 113.7 Other operating costs 32.4 205.8 19.5 133.2 Freight (CIF charged to customers) (8.2) (3.4) Total costs less freight 197.6 129.8 Non-cash costs Depreciation 40.9 24.3 Share-based payments 1.3 (42.2) 0.8

  10. Slide 10: 2012 – 2014 Cash Operating Costs

    2012 – 2014 Cash Operating Costs Final Product Production (Kt) - Right Axis Ongoing Cash Operating Cost per Tonne (US$/t) - Left Axis $200.0 1000 $198.0 900 $196.0 800 $194.0 700 $192.0 600 $190.0 500 $188.0 400 $186.0 300 $184.0 200 $182.0 100 $180.0 0 2012 2013 2014  Cost per tonne fell in 2014 a

  11. Slide 11: 2014 Cash Operating Costs

    2014 Cash Operating Costs Logistics & Travel Logistics & Other Other 8% Travel 8% 15% Distribution Costs 9% Distribution 5% Production Costs Overheads 6% 12% Production Fuel Overheads 8% 2013 10% Power 2014 6% Labour payroll 33% Fuel 7% Repairs & Maintenance 18% Labour payroll 31% Power 5% Repairs &

  12. Slide 12: Yearly Capex 2012 - 2014

    Yearly Capex 2012 - 2014 250 Expansion capex Sustaining capex 200 150 US#039; millions 100 50 0 2012 2013 2014  Long period of investment completed in 2013 and Phase II expansion brought into production  Sustaining capex tightly controlled in 2014 at US$5.2m (2013: US$10.2m) 12

  13. Slide 13: 2014 Balance Sheet Review

    2014 Balance Sheet Review 2014 2013 Comment on 2014 & movement US$m US$m Property, plant & equipment 865.2 967.1 Impairment and depreciation of expanded plant Deferred tax asset - 0.1 Inventories 62.5 44.2 Increased product stocks due to difficult market Trade & other receivables 28.1 19.3 Increase

  14. Slide 14: Group Debt

    Group Debt  Group Debt at 31 Dec. 2014: US$337.7m (2013: US$355.2m)  Lenders: Project - Absa, KfW, FMO, EIB, EAIF & AfDB; Group - Absa/Barclays  Guarantors: ECIC (of Absa), MIGA & Hermes (of KfW)  Average project interest rate at Dec. 2014 was 9%  Senior: US$80m, floating @ LIBOR + 3.5% to 5.3%

  15. Slide 15: April 2015 Loan Amendment

    April 2015 Loan Amendment Amendment to debt agreed with lenders on 29 April 2015 Purpose to create a stable financial platform for Kenmare Amendment provides flexibility and better aligns terms of the group financing with projected cash flows Key terms include: • a new money commitment of up to US$5

  16. Slide 16: Group Lenders at 31 December 2014

    Group Lenders at 31 December 2014 Previous New Loan Balance Maturity Maturity US$m Senior Project Loans AFDB 21.2 2018 2021 Absa (ECIC) 23.9 2015 2018 EAIF 2.6 2018 2021 EIB 9.5 2018 2021 FMO 8.6 2016 2019 KfW IPEX-Bank (Hermes) 6.6 2015 2018 KfW IPEX-Bank (MIGA) 7.7 2018 2021 80.1 Subordinated Proj

  17. Slide 17: 2015 Update

    (3) 2015 Update 17

  18. Slide 18: Interim Management Statement – Q1 2015

    Interim Management Statement – Q1 2015  Debt amendment signed with lenders in April 2015  Sales of finished products up 8% to 209,600 tonnes (Q1 2014: 193,900 tonnes)  Grid power outage during Q1 was mitigated by operation of generator sets  Ore mined down 57% to 3,211,000 tonnes (Q1 2014: 7,543

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